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Eron Lenders
To the lenders in project #1175 - 570 Dunsmuir Holdings Ltd.
Lender update
April 15, 1998
Further to our letter dated January 15, 1998, we are writing to provide you with a further update on the status of the above noted mortgage.
Project Status
In January, we advised you that we were in the final stages of negotiating the completion of the building with the contractors and other trades. Since that time, due to the complexity of the transaction, the number of parties involved and the enhanced potential recovery to be achieved by completing the building program, we have faced innumerable issues to be dealt with to accomplish the financial transactions contemplated in starting construction.
We have been in contact with the Project Lead numerous times throughout this time consuming process and have worked together with certain lenders to bring about a successful end to these negotiations. Working with this group of volunteer lenders has been useful and has saved this project certain expenses during this negotiation process.
In addition to dealing with contractors, trades and arranging satisfactory financing terms, we have also been directly involved in negotiations surrounding a mortgage of this mortgage in favour of Crest Capital Corp. ("Crest"). In the normal course, we attempted to satisfy ourselves as to the validity, enforceability and priority of that mortgage, however we were unable, from documents available to us, to prove beyond doubt that the Crest mortgage is in fact a good, valid charge on the property. As a result, we were obliged to go to Court to seek relief to enable the financial charges we had arranged with the new financing to rank ahead of Crest's position, for without that order, the entire transaction would have collapsed. Our lawyers have attended court no less than four times since our last communication with you, and advise that we were successful in having the Crest mortgage postponed to the new financing arranged.
All those negotiations are now completed and with financing arranged, we have satisfied lien claims and have retired the first mortgage. Construction is now getting underway again. We anticipate a 4 month period to substantial completion.
During this next phase, we will monitor construction and leasing progress. It is also our intention to sell the property and in this regard will develop an information package to be provided to qualified interested purchasers. We have established the end of August as our target date to see the property sold and closed.
Lender Communications
As you are probably aware we have a web site at http://www.eron-pwl.com. On this site you will find project specific updates as well as related court orders and other general information.
We will continue to communicate directly with all lenders, we urge you to take advantage of the web site so that you can receive first hand current information from the Judicial Trustee in the most cost effective manner we have available.
We plan to issue another letter as soon as we have significant new information with respect to the distribution. In the meantime, if you have any specific questions or information concerning the project please contact us in writing at 500 - 1380 Burrard Street, Vancouver, BC, V6Z 2H3 or by fax at (604) 688 6128 marked to the attention of 570 Dunsmuir - Project Lead.
Yours truly
Judicial Trustee
Eron Lenders
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